By Patrick Thomas
Small-business owners' confidence in the U.S. economy fell in August after rising the prior month, according to the National Federation of Independent Business.
The NFIB Small Business Optimism Index had an August reading of 103.1, down 1.6 points from the prior month. The NFIB report said optimism slipped because fewer business owners expect better business conditions and real sales volumes in the coming months.
"In spite of the success we continue to see on Main Street, the manic predictions of recession are having a psychological effect and creating uncertainty for small business owners throughout the country," NFIB Chief Executive Juanita Duggan said in prepared remarks. "Small business owners continue to invest, grow, and hire at historically high levels, and we see no indication of a coming recession."
Overall, six components in the index declined in August, three rose and one was unchanged.
The NFIB survey is a monthly snapshot of small businesses in the U.S., which account for nearly half of private-sector jobs. Economists look to the report for a read on domestic demand and to extrapolate hiring and wage trends in the broader economy.
The NFIB survey results -- based on responses from 680 small-business owners last month -- showed that the labor market remains tight with a record 27% of firms reporting finding qualified workers as their number one problem, the report said.
Owners reporting higher compensation fell three points to a net 29% of all firms. Plans to raise compensation rose two points to a net 19% and 59% of firms reported capital outlays, up two points on top of a three-point gain in July.
Job creation increased in August, with an average addition of 0.19 workers per firm compared with 0.12 in July. The uncertainty index rose four points, that small business owners are reluctant to make major spending commitments, the report said.
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